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Does aid induce brain drain? A panel data analysis

Author

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  • Darwin Ugarte Ontiveros
  • Vincenzo Verardi

Abstract

Recent evidence suggests that aid induces migration. This result is nevertheless not very informative from a policy perspective since what counts in terms of welfare consequences is the composition of migration. In this paper we focus on education and study which of skilled or unskilled migration is more sensitive to aid. More specifically we investigate the possible channels through which aid might affect self-selection among international emigrants and find that aid induces positive selection by easing the movement of highly qualified workers. Interestingly, we find that technical cooperation and bilateral aid have a significant influence on skilled migration but do not seem to affect unskilled migration significantly. On the other hand, aid targeted to development enhancement affects both categories but seems to have a larger effect on the former. JEL codes: F35, F22, C23

Suggested Citation

  • Darwin Ugarte Ontiveros & Vincenzo Verardi, 2012. "Does aid induce brain drain? A panel data analysis," ULB Institutional Repository 2013/236562, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/236562
    Note: SCOPUS: ar.j
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    Cited by:

    1. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Spatial aid spillovers during transition," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 79-95.
    2. Lea Marchal & Claire Naiditch & Betul Simsek, 2022. "How Foreign Aid Affects Migration: Quantifying Transmission Channels," EGEIWP 02-2022, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Jan 2023.
    3. Aida Galiano & José Gabriel Romero, 2018. "Brain drain and income distribution," Journal of Economics, Springer, vol. 124(3), pages 243-267, July.
    4. Marko Gregl Klavdij Logožar, 2017. "The Impact of Development Aid on the International Migrations in the African, Caribbean, and Pacific Group of States," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 20(1), pages 101-112, May.

    More about this item

    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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